Jan 31 (Reuters) - Japanese stocks attracted the largest

weekly foreign inflow in more than three months in the week

through Jan. 25, driven by optimism over global AI investments

that boosted investor sentiment and fueled a rally in the local

technology sector.

According to data from Japan's Ministry of Finance,

foreigners snapped up a net 753 billion yen ($4.87 billion) of

Japanese shares last week, their largest weekly net purchase

since Oct. 12, 2024.

Last week, U.S. President Donald Trump's announcement of a

private sector investment of up to $500 billion in AI

infrastructure drove shares of Japan's SoftBank Group

up by about 16%, boosting demand across the broader technology

sector. Consequently, the Nikkei share average surged

about 3.85%.

However, the index lost 0.65% this week as surging interest

in Chinese startup DeepSeek's low-cost artificial intelligence

model triggered a selloff in AI-related stocks.

Last week, foreigners net bought Japanese debt securities

for a fourth successive week with about 608.5 billion yen in net

purchases. They acquired short-term bills worth 481.3 billion

yen and 127.2 billion yen of long-term bonds on a net basis.

Japanese investors, meanwhile, were net buyers of foreign

equities for the seventh successive week with net purchases to

the tune of 217.2 billion yen.

They also racked up long-term foreign bonds of 178 billion

yen and short-term securities of 119.2 billion yen, extending

net purchases into a third successive week.

The Bank of Japan raised interest rates last Friday to their

highest since the 2008 global financial crisis and revised up

its inflation forecasts, underscoring its confidence that rising

wages will keep inflation stable around its 2% target.

($1 = 154.6800 yen)